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EQUITIES: Japanese Equities Lower As Geopolitical Tensions Rise

EQUITIES
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  • Japanese equities are lower this morning as tensions mount in the Middle East and dampen demand for exporters, semiconductor stocks have seen the bulk of the losses with Tokyo Electron -2.5%, Advantest -3.50% & Lasertec -3.40%.
  • Energy and O&G names are trading higher after crude oil rose 1.5% in early Asian trading after gaining more than 2% on Tuesday benefitting after Iran fired a barrage of missiles at Israel, although these names make up only a small portion of Japanese equity benchmarks.
  • JGB curve has steepened with yields  -1bps to +1.5bps, there has been little impact on banking stocks today with the TOPIX Banks Index -0.10%.
  • USD/JPY is little changed this morning trading at 143.61. Exporters has been extra sensitive to moves in the currency recently, taking at look at technical recent gains in USDJPY appear to have been a correction and Friday’s sell-off reinforces this theme. The move down also highlights a likely resumption of the downtrend. An extension lower would open 139.58, the Sep 16 low and a bear trigger. Clearance of this level would confirm a resumption of the downtrend and open 139.00, a Fibonacci projection. Key resistance is at 146.085, the 50-day EMA.
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  • Japanese equities are lower this morning as tensions mount in the Middle East and dampen demand for exporters, semiconductor stocks have seen the bulk of the losses with Tokyo Electron -2.5%, Advantest -3.50% & Lasertec -3.40%.
  • Energy and O&G names are trading higher after crude oil rose 1.5% in early Asian trading after gaining more than 2% on Tuesday benefitting after Iran fired a barrage of missiles at Israel, although these names make up only a small portion of Japanese equity benchmarks.
  • JGB curve has steepened with yields  -1bps to +1.5bps, there has been little impact on banking stocks today with the TOPIX Banks Index -0.10%.
  • USD/JPY is little changed this morning trading at 143.61. Exporters has been extra sensitive to moves in the currency recently, taking at look at technical recent gains in USDJPY appear to have been a correction and Friday’s sell-off reinforces this theme. The move down also highlights a likely resumption of the downtrend. An extension lower would open 139.58, the Sep 16 low and a bear trigger. Clearance of this level would confirm a resumption of the downtrend and open 139.00, a Fibonacci projection. Key resistance is at 146.085, the 50-day EMA.